Washington, DC - Long-range funding doubts notwithstanding, recent polling shows that more workers than ever before are counting on Social Security as a "major source" of their retirement income, reports Gallup.
The pollsters found that more than a third of the workforce has high expectations about the role Social Security will play in retirement compared to just over a quarter of those surveyed a decade ago.
According to Gallup, in addition to the 36% of nonretirees expecting Social Security to be a major source of retirement income, another 48% believe it will be a minor source. Fourteen percent do not expect Social Security to be a source of retirement funds for them at all.
"But unless Congress acts to bridge Social Security's widening long-term funding gap in a timely and adequate fashion, those expectations may not be met. In fact, the Congressional Budget Office recently reported that the funding gap is more than four times what it was in 2008. And, the reality is that the Social Security Old Age Survivors Insurance and Disability Insurance funds are in trouble. In fact, the Disability Fund has had five consecutive years of deficits and next year it may be forced to reduce payouts to recipients. The Old Age fund is not in much better shape and could be forced to do the same as early as 2033. So, while the Gallup poll may be an accurate snapshot, it falls short of describing the big picture," Dan Weber, president of the Association of Mature American Citizens, said.
Weber and his senior advocacy organization have focused on the Social Security dilemma as a top priority. They've been holding dozens of meetings on Capitol Hill seeking to make the issue a priority for lawmakers. They have also set up a dedicated Web site called socialsecurityreport.org to raise awareness. AMAC has gone so far as to propose what it calls a Social Security Guarantee. It suggests the implementation of age setbacks for future recipients, guaranteed cost of living adjustments and the provision for an individual, discretionary retirement savings plan.
AMAC calls the savings plan an Early Retirement Account or ERA, which Weber describes as a way for those paying into Social Security to have some control of how the money is invested. It's similar to an IRA or a 401(k) plan, he says. But, in order to ensure that the ERA users avoid risky investments, half of the money deposited in their ERA accounts would have to be invested in guaranteed interest products such as government bonds or annuity contracts. Workers would be free to invest their balances in any other investment that meets certain suitability standards.
Surveys conducted in recent years suggest a voluntary, personal Social Security supplement such as the ERA would be popular. "It's easy to understand, it's voluntary and it's a logical hedge against the vagaries of the future," Weber explained.
He said that he's "riled by attempts to ignore the facts and to obfuscate the issue by suggesting solutions such as immigration reform on the theory that providing a pathway to citizenship will mean new workers and new funding. What we need is a real, dedicated, long-term solution for Social Security, not pie-in-the-sky theories to avoid making hard decisions."
Weber said that Washington is "waking up to the fact that an ERA is a necessary component of any Social Security solution. Even President Obama appears to agree that it is a good thing, having proposed a baby-step in the right direction that the president calls a MyRA. It's a baby step in the right direction but the MyRA would put the government in control. The president, himself, described his idea as a 'starter savings account.' The ERA we propose would offer even greater benefits and incentives for users and puts control of their plans in their hands, not the government."
